California Democrats are racing to reverse a new $25-an-hour healthcare worker minimum wage law going into effect at the end of the week after the governor’s office estimates it would cost the state $4 billion annually.
The news of the costs isn’t new. In fact, it was projected by legislative analysis and ignored by Gov. Gavin Newsom (D-CA), who signed the law in October. Now, as it gets ready to go into effect, lawmakers are looking for ways to delay it.
California’s budget deficit has grown in years and now stands at a hefty $45 billion.
Newsom’s office projects the new healthcare minimum wage could set the state back another $4 billion per year thanks to higher Medicaid costs and compensation for workers at state-owned facilities.
Presently, the state’s minimum wage for all workers is $16 an hour. This Saturday, the wage will be bumped up between $18 and $23, depending on the job and healthcare provider. The way the law is written, nearly all workers in California healthcare facilities, including the janitors and administration staff who work in the buildings, will be making at least $25 an hour by 2028.
Earlier this year, Newsom also signed legislation that would give fast-food restaurants operating on government property a $20-an-hour fast-food minimum wage.
Critics claim California’s rush to raise wages is fiscally irresponsible and indicative of how “progressive mandates boomerang.”
“Democrats shrugged when healthcare providers warned that the wage mandate could force cuts to patient services,” a recent Wall Street Journal editorial read. “Who cares if Californians wait longer before being seen at the ER? But now Democrats worry that the state’s higher health costs could force bigger government spending cuts. Oh no. Californians may have to wait even longer for their bullet train to nowhere.
“Mr. Newsom is proposing to tie health worker minimum-wage increases to the state’s general fund revenue and to exempt state facilities. But once capital-gains revenue picks up again, California’s private healthcare providers will be stuck paying for the wage mandate, which they will ultimately pass on to patients. Far better to repeal the $25 wage minimum en toto.”
One group that doesn’t want that to happen is the Service Employees International Union-United Healthcare Workers West, the union that backed the healthcare pay increase. They have recently launched an advertising campaign to try to force Newsom’s hand. One post on X shows a dialysis worker named Alice, whom the union says provided lifesaving care.
The ad continues: “Yet, with caregivers at her facility starting out at only $18/hr, it’s no wonder there’s a short staffing crisis. A $25/hr minimum wage for healthcare workers will help ensure patients get the care they need.”
Nathan Selzer, the communications director for SEIU-UHW, an affiliate of SEIU California, which sponsored the law, said union workers “were concerned and remain concerned.”
“What we saw in conversations earlier this year was folks really focusing only on money and only on dollars and cents, and not on what those dollars and cents are used for,” he told CalMatters. “We made a decision that we’ve got to make sure we’re reminding people why this was made into law to begin with.”
The law’s author, Democratic state Sen. Maria Elena Durazo, has already submitted “urgent” paperwork for legislation that would delay the increase to July 1.
“SB 525 provided a historic wage increase to more than 450,000 health care workers mainly women and people of color, who take care of us and keep our health care system functioning,” Durazo said in a statement. “It is clear that these workers need this to help support their families and I appreciate health care employers that recognized this and have begun to increase wages. SB 828 moves the start date of the health care minimum wage by one month to July 1, 2024. This aligns SB 525 with the budget year and allows the legislature to continue discussions with the administration and technical changes to ensure health care workers get their raises.”
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Getting the start date pushed back will require a two-thirds vote from the legislature, which lawmakers seem poised to do.
Calls to Newsom and Durazo for comment were not returned.